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What does the Bible say about giving?
"Remember the LORD your God, for it is He who gives you the ability to produce wealth." (Deuteronomy 8:18 NIV)
"Honor the LORD with your wealth, with the firstfruits of all your crops." (Proverbs 3:9 NIV)
"Calling His disciples to Him, Jesus said, 'I tell you the truth, this poor widow has put more into the treasury than all the others. They all gave out of their wealth; but she, out of her poverty, put in everything--all she had to live on.'" (Mark 12:43-44 NIV)
"Sell your possessions and give to the poor. Provide purses for yourselves that will not wear out, a treasure in heaven that will not be exhausted, where no thief comes near and no moth destroys. For where your treasure is, there your heart will be also." (Luke 12-33-34 NIV)
"There were no needy persons among them. For from time to time those who owned lands or houses sold them, brought the money from the sales and put it at the apostles' feet, and it was distributed to anyone as he had need." (Acts 4:34-35 NIV)
"On the first day of every week, each one of you should set aside a sum of money in keeping with his income, saving it up, so that when I come no collections will have to be made." (I Corinthians 16:2 NIV)
"Remember this: Whoever sows sparingly will also reap sparingly, and whoever sows generously will also reap generously. Each man should give what he has decided in his heart to give, not reluctantly or under compulsion, for God loves a cheerful giver. And God is able to make all grace abound to you, so that in all things at all times, having all that you need, you will abound in every good work. As it is written: "He has scattered abroad his gifts to the poor; his righteousness endures forever." Now he who supplies seed to the sower and bread for food will also supply and increase your store of seed and will enlarge the harvest of your righteousness. You will be made rich in every way so that you can be generous on every occasion, and through us your generosity will result in thanksgiving to God." (II Corinthians 9:6-11 NIV)
"Command them to do good, to be rich in good deeds, and to be generous and willing to share. In this way they will lay up treasure for themselves as a firm foundation for the coming age, so that they may take hold of the life that is truly life." (I Timothy 6:18-19)
"If anyone has material possessions and sees his brother in need but has no pity on him, how can the love of God be in him?" (I John 3:17 NIV)
The greatest gifts: Time, Talents, and Prayer.
Christianity and the church began in a poor but generous society. From its beginning, Israel knew that it existed because of God's specific acts. Security was based on trusting God, the source of all blessings. Gifts of tithes, first fruits, first born animals, and sacrifices served two purposes. The gifts praised God for His kindness and declared dependence on God.
Christians as the church exist because of God's specific acts: Jesus' crucifixion and resurrection. In less than fifty years, the church contained prosperous believers (I Timothy 6:17-19). They were instructed to do good, be rich in good works, and share.
A wondrous feature of Christianity: every Christian is rich before God. The widow's gift would not supply a poor person's daily, physical needs. Yet, Jesus valued her gift (Luke 21:1-4). Jesus' parable of the talents declared that God bases expectations on personal ability (Matthew 25:15). Early Christians were taught spiritual opportunity is based on what we have, not on what we do not have (II Corinthians 8:12).
God's love, grace, and forgiveness are equally available to the poor and the prosperous. No gifts are more useful than time or more powerful than prayer. Physical gifts produce eternal benefits when they express the godly person's faith and trust.
Weekly Giving
Cash or Checks Checks should be made payable to the West-Ark Church of Christ. IRS regulations state that individual contributions of $250 or more must be acknowledged contemporaneously and in writing in order to be deductible. Accordingly, the West-Ark Church of Christ ("WCC") office will provide written acknowledgment of contributions of $250 or more shortly after the close of the calendar year. If you do not receive written acknowledgment of your donation by February 1 of the following year, please contact the church office with a copy of your canceled check(s).
Obviously, no acknowledgment of cash contributions is possible when they are made anonymously. However, contribution envelopes are provided in foyer. To use the envelopes, simply place your contribution in the envelope and write the amount on the flap. Be sure to remember your unique contribution number. Shortly after the close of the calendar year, the WCC office will make available your contribution envelopes upon your request.
Special Giving
Weekly giving is necessary for the ongoing work of the church. These contributions are planned and purposed in advance. However, each of us should consider the opportunity for special gifts based upon special circumstances. As distinguished from our weekly contribution, these special gifts are often called "planned giving or special giving."
If you are considering these methods of giving, the West-Ark Church of Christ Business Management Team will be glad to render assistance, but we encourage you also to seek the advice of financial or legal counsel, where appropriate.
Bequest
A bequest through a will is a very common type of special gift. This is also one of the simplest and most effective ways to provide for West-Ark's long-term financial needs. Every adult should have a will, and every Christian should consider making a gift through his or her estate. There is a scriptural, moral, and legal responsibility to provide for a spouse, minor children, and any others who may be dependent. In these instances, much of the estate will be left for the benefit of others.
Everything a person owns (during life and at death) belongs to God, and as a steward he or she needs to distribute the estate to family members or friends and to ministries that will use those assets in a way that honors the Lord. A gift through a will can be a specific item (e.g., stock), a specified dollar amount or a percentage of the estate. The final size of the estate is uncertain at the time the will is written. Therefore, it is often more desirable to use percentages than dollar amounts to describe how the estate is to be distributed. The first decision will be what percentage is to be distributed to family members, and what percentage to the Lord. The second decision will be what ministries will be included in the Lord's portion.
One of the benefits of a will is that it can be changed at any time. A person can reevaluate his giving priorities as family and financial circumstances change over time. A gift through a will to a qualified charity typically is deductible for Federal Estate Tax purposes.
As you prepare or update your will, simply direct your bequest to "West-Ark Church of Christ, Fort Smith, Arkansas." Alternatively, you may wish to direct your contribution to the West-Ark Church of Christ Endowment Trust or to a specific ministry. If you have not yet prepared a will, you may wish to consider this critical step in planning for your family and for your estate. If you wish, the West-Ark Business Management Team will provide a list of attorneys who can advise you on this matter.
The Church as a Beneficiary
One easy method of making a special gift is by naming the West-Ark Church of Christ as beneficiary of any account that allows such a designation. For instance, one might show the church as the beneficiary on a checking account or savings account. At a bank, this is often known as Pay on Death (or POD) account. Some institutions may refer to this arrangement as Transfer on Death (or TOD). Your financial institution can provide additional advice on using this option.
Retirement plans allow the owner to name a beneficiary. At the death of some individuals, there may be a large (up to 70%) tax levied against a retirement account from income and estate taxes. These taxes can be avoided if the beneficiary of the plan is a qualified charity. For example, if an individual has a significant IRA or other tax sheltered retirement account, and wishes to leave a charitable bequest, they should consider using this account for all or part of their charitable bequest.
Automatic transfers at death are often referred to as "will substitutes" because they bypass distribution through the will. Such transfers avoid the probate process. These assets will avoid the Federal Estate Tax when transferred to a qualified charity, such as the church.
WCC Endowment Trust
The Elders of the West-Ark Church of Christ have established and will administer the WCC Endowment Trust. Under the strict terms of this Trust, earnings are distributed annually for "the benefit of the evangelistic programs of the West-Ark Church of Christ." Corpus (principal) of the trust must be retained in the Trust. Gifts of cash, securities or other property may be directed to the Trust. Additionally, the Trust may be named as a beneficiary in your Will or other estate document. Generally, donations to the Trust are deductible to the same extent as if they were contribution to the general fund of the church. Unless otherwise specified, contributions to the WCC Endowment Trust are memorialized on a plaque hung in the church foyer. Additional details or a copy of the Trust Agreement are available from Bob Davidson.
Outright Gifts (other than cash)
Gifts other than cash can be a significant benefit to the church. Such gifts might include stocks, bonds, mutual fund shares, real property, or tangible property. All gifts are subject to the Gift Acceptance Policy of the church. Please direct any questions regarding unusual property to any member of the WCC Business Management Team.
Depending on the value of the property, a non-cash gift may require special handling and reporting. Transfer of ownership will often require some form of legal document. There are special Internal Revenue Service rules for valuing and reporting non-cash gifts. The tax-deductible value of some gifts will be limited to the donor's cost basis or the Fair Market Value (whichever is lower). Donors will be allowed to deduct the full value of some gifts (including all appreciation), and will avoid any tax on capital gain.
Any property given during life will be removed from the estate, and will not be subject to probate or the Federal Estate Tax.
Appreciated Securities Under most circumstances, the donation of appreciated securities (those which have increased in value) can be advantageous because the donor is able to deduct the market value of the securities on the date of the gift without paying taxes on the amount of the capital gain. Here is a simple example: assume that you bought stock in XYZ Corp at $1000 over a year ago, and it is now worth $3000. You could sell the stock for $3000 and donate the proceeds to the church. You would be able to take a deduction of $3000 for the gift but you would have to pay taxes on the gain of $2000. However, by donating the stock itself to the church, you are entitled to the same $3000 charitable deduction but you do not pay taxes on the gain since you never sold the stock. The church will immediately sell the stock but does not pay taxes as a charitable corporation.
Common and preferred stock traded on a public exchange are the most common type of securities contributed to charity. Publicly traded stock that meets the minimum holding period requirement of one year qualifies as long-term capital gain property and can, thereby, be deducted for charitable income tax deduction purposes at its Fair Market Value. The resulting deduction is subject to the 30% limitation, meaning that the deduction typically cannot exceed 30% of the donor's adjusted gross income for the year. The Fair Market Value of publicly traded stock is generally the average of the highest and lowest quoted selling prices on the valuation date, typically the date that the security is transferred to the church.
Stock donated to charity usually has been held more than a year because such stock is more likely to have appreciated in value. There is no particular advantage to donating stock that has not appreciated. For stock that has fallen below your purchase price, you would probably want to sell the stock, recognize the capital loss, and donate the cash proceeds.
Stock that does not meet the minimum holding period requirement of one year is considered ordinary income property with the charitable deduction based on the lesser of the donor's adjusted cost basis or Fair Market Value of the stock on the date of contribution. The resulting deduction is subject to a limitation of 50% of the donor's adjusted gross income.
Like stocks, mutual funds are treated as capital assets for charitable contribution purposes and, if appreciated in value, make attractive charitable gift candidates. The Fair Market Value of a share in an open-end investment company ("mutual fund") is the public redemption price of a share. There are other rules for restricted or closely-held securities.
How to Donate Securities A stock certificate. If you have the actual stock certificate, you can donate it to the church by delivering the following to the WCC office:
- The unsigned stock certificate(s).
- A signed letter of authorization, stating that you are gifting the shares to the church. For instance, you might say, "I (or we) hereby donate the attached certificate for XXX shares of XYZ Corp. to the West-Ark Church of Christ -- Tax Id 71-6090472."
- A signed "Stock Power." The "Stock Power" should be signed by all owners exactly as the names appear on the certificate(s). You must have the signatures guaranteed by with a "medallion guarantee" from a bank or a brokerage firm. There is only one stock power needed for each issue - not each certificate. If you need a "Stock Power" form, you may contact the church office.
A partial gift of a stock certificate. If you wish to give part of the shares represented by an actual share certificate that you hold, you will want to send written instructions to the Transfer Agent (usually noted on the stock certificate) to transfer ownership of the desired number of shares to West-Ark Church of Christ, 900 North Waldron Road, Fort Smith, AR. The Tax Identification Number for West-Ark is 71-6090472. All owners noted on the certificate must sign the letter of instruction, and the signature(s) must be guaranteed by with a "medallion guarantee" from a bank or a brokerage firm.
For instance, assume that you have a certificate for 1000 shares of XYZ Corp, and you wish to donate 600 shares to West-Ark. You would send the certificate and a signed letter (with signature guarantees) instructing the Transfer Agent to transfer 600 shares to West-Ark Church of Christ and leave the remaining 400 shares in your name. The transfer agent will return both of the new share certificates to you, and you will deliver your donation to the church office. The transfer agent may charge a nominal fee (e.g., $15) for the transfer. Some transfer agents may require a specific form; you should contact the agent before you prepare the paperwork.Donation of securities or mutual funds held by a financial institution. If you do not hold the share certificate, you would send a letter instructing the financial institution (e.g., brokerage firm or mutual fund) to transfer the appropriate number of shares to the brokerage account of West-Ark. Do not request that a stock certificate be issued. This can result in modest fees and a delay in the actual gift. You may transfer securities to either of the following accounts:
John Taylor Financial Group
DTC # 0750
For Account # 85999952
West-Ark Church of Christ
# of shares to transfer
(Alternatively, $ amount of a mutual fund if you don't specify number of shares)Merrill Lynch Pierce Fenner and Smith
DTC # 3049
For Account # 567 04206
West-Ark Church of Christ
# of shares to transfer
(Alternatively, $ amount of a mutual fund if you don't specify number of shares)Generally, all account holders must sign the letter of instruction, and the signature(s) must be guaranteed with a "medallion guarantee" from a bank or a brokerage firm. Other forms of guarantee, such as notary public, are not acceptable. Please send a copy of your letter of instruction to Bob Davidson or Larry Todd so that we can coordinate and acknowledge receipt. There may be some restrictions on the transfer of certain mutual funds; we can provide assistance if you wish.
U.S. Savings Bonds If Series E, EE, H, or HH savings bonds are transferred to charity during life, the donor may claim a charitable contribution deduction for their Fair Market Value. However, all unrealized income may be taxed to the donor on the date of contribution. This restriction makes savings bonds generally inappropriate for transfer during the lifetime of the donor. However, such bonds may be transferred on a testamentary basis without recognition of income by the decedent or charity.
Other bonds, such as government bonds, corporate bonds or even WCC Church Facilities Financing Bonds, are suitable instruments for donation. For bonds held more than a year, a gift is recognized in the amount of the Fair Market Value for publicly traded bonds. For WCC bonds, the value is the principal plus accrued interest.
Date of Delivery Regardless of your form of donation of appreciated securities, the WCC office will provide a written letter acknowledging your contribution. We will attempt to determine the market value of the securities on the effective date of the donation if they are publicly traded.
Some donors have made year-end contributions of securities assuming the contribution was complete only to find that the securities were actually delivered and, therefore, the gift made in the following tax year. The date on which a delivery of securities is considered complete depends on whom the securities are delivered by and to whom they are delivered.
Securities Physically Delivered to Church by Donor - If a donor, donor's agent, or donor's broker physically delivers securities to the charity, the transfer is considered complete on the date the certificate and signed stock power form are delivered.
Securities Delivered to Church by Mail - If the securities and a properly signed stock power are mailed to the church or its agent by the donor or donor's agent, delivery is considered complete on the date of mailing provided they are received by the charity in the ordinary course of the mails.
Securities Reissued in Church's Name - If the donor delivers the stock certificate to his broker or to the issuing corporation or its agent, for transfer into the name of the church, the gift is complete on the date the stock is transferred on the books of the corporation. This will be shown on the certificate or accompanying papers and will be later than the date of the mailing.
Securities Held in Street Name -Most brokerage accounts hold securities in "street name." This means that although the securities are posted to the account of the client, they are technically owned by the brokerage firm. In such cases, the client will instruct his or her broker to transfer securities from the client''s account into the account of the church. The delivery date is the date on which the brokerage firm transfers title.
In this case, it is important to note that a transfer is not made at the time that instructions to transfer the shares are given to the donor's agent; rather, it is the date on which the transfer is made on the books of the issuing corporation. When contemplating a year-end transfer, one must take care to provide adequate time for this to occur or run the risk that the transfer is actually completed in the following tax year.
Other Forms of Special Giving
Depending upon individual circumstances, there are other forms of special giving that are available. Professional legal and financial assistance is usually required for implementation.
Living Trust The Living Trust is a good estate-planning tool for some families or individuals. The most common form of a Living Trust in use is the Revocable Living Trust. This document is very much like a will in that it includes your instructions for handling your final affairs and who you want to receive your assets after your death. Unlike a will, a Living Trust does not go through probate. Such a trust can be written to include a charitable gift to the church. A charitable deduction may not be available in certain transfers where another party, such as a wife or a child, is granted an interest before the interest of the church of vested; you should contact a knowledgeable attorney on the preparation of a Living Trust.
Life Estate Gift A donor may deed a personal residence, farm, or other real property to the Lord's work now, but retain lifetime enjoyment and use of the property. The donor may continue to live in the home. In the case of other property, the donor may continue to collect any income generated. The donor continues to pay the taxes, insurance, and maintenance of the property. At the donor's death, the property becomes the immediate property of the church. The church would then sell the property and use the cash proceeds.
An irrevocable Life Estate Gift will generate a tax-deductible gift based on the "remainder interest" the person holds in the property. This value is determined according to government tables and the donor's age. This amount may be claimed as a deduction for Federal Income Tax purposes in the year the agreement is completed. This arrangement removes the property from the estate, and it will not be subject to either probate or the Federal Estate Tax.
Life Insurance Gifts Life insurance is one way of making a larger gift than a donor may be able to make otherwise. This gift option is available for both new and existing policies. If done properly, the annual premiums paid on the policy can be deducted as a charitable gift for Federal Income Tax purposes.
Life insurance proceeds are often included in the estate for calculation of the Federal Estate Tax. This is not the case if the beneficiary of the policy is a qualified charity.
The donor merely lists the church as the charitable beneficiary on the policy. The church can be the primary beneficiary or the secondary beneficiary after a family member. In this latter case, there would be no income tax deduction on the premiums paid.
Charitable Remainder Trust The Charitable Remainder Trust is designed for the donor who wants to make a gift to the Lord's work, but needs income during life. This trust is especially suited for a donor with highly appreciated property (either securities or real estate). It is possible to transfer the property to the trust and possibly avoid all tax on capital gain.
A Federal Income Tax deduction is available for the year the trust is created, and is based on the value of the trust, the age of the donor, and the payout percentage selected. The assets in the trust are not subject to probate or the Federal Estate Tax.
A Charitable Remainder Trust may be created and funded at the time of death for the benefit of one or more survivors. Assets transferred to the trust would not be part of the estate for purposes of the Federal Estate Tax, except to the extent there is an income or annuity interest that is continuing to be paid to a beneficiary after the death of the donor.
The church would be named as a beneficiary in the trust. At the death of the income beneficiaries, the assets from the trust would be distributed to the church. For example, assume that John and Mary, spouses, set up a CRT and provide that the annuity or unitrust amount is paid to John and Mary for life and thereafter to the church. After John dies, the CRT will be included in John's taxable estate, but the CRT should qualify for the Marital Deduction thereby resulting in no tax on the CRT. Payments are paid to Mary until her death, after which the trust assets become the property of the church.
Another example: John sets up a CRT to pay the unitrust amount to John's children, Chelsea & David, for 20 years, then to the church. John dies prior to the expiration of the 20-year term of the CRT. The CRT is included in John's estate, but a deduction is allowed for the value of the remainder interest going to the church. For the remainder of the 20 years, Chelsea and David receive payments, after which the church may liquidate the assets.
The Charitable Remainder Trust is one of the most technical gift plans, and requires expert help in both setting up the trust and the management of the trust. If you are interested in this method, we can suggest financial or legal counsel.
Gift Annuity Agreement and Deferred Gift Annuity Agreement The charitable gift annuity is a perfect plan for a donor who wants to make a future gift and receive a guaranteed stream of income for life. Annuity rates are based on age, and often are quite competitive with what a donor can earn from low risk investments in the market. A deferred payment annuity allows for payments to begin at a later day (such as at retirement), and results in both a larger charitable gift and a greater annual income. Both immediate and deferred annuity plans are an excellent means of "supplementing" retirement, but are not meant to be retirement plans.
This plan provides a Federal Income Tax deduction in the year that the annuity is entered. The amount of the gift is determined by the age of the annuitant, the annuity rate, and the principal amount.
Another advantage of the gift annuity is that part of the annual income is considered tax-exempt. Also, if the annuity is funded with appreciated securities, there are significant savings related to tax on capital gain. A portion of the capital gain is avoided all together, and the remainder is reported in small increments over the life expectancy of the annuitant.
All remaining funds in the agreement at the annuitant's death are available for the ministries designated by the donor. Any amount placed in the annuity during life is removed from the estate and will not be subject to probate or the Federal Estate Tax.
The Gift Annuity Agreement and Deferred Gift Annuity Agreement are less complicated than the Charitable Remainder Trust. However, professional assistance will be required for creation and administration of an annuity program.
Reasons to Consider Special Giving
Special giving can help church members to fulfill the vision God has placed in their hearts for serving Christ in all of life. Most church members give regularly to the ongoing ministries of the church. They do so willingly and joyfully. As they mature in their walk with God, they increasingly want their life to count for Christ. Many would be very open to considering ways of giving that would significantly increase their ability to invest in God's work if they could do so in a way that would not jeopardize personal and family needs. Special giving may provide a vehicle by which they are able to realize many of their planning needs. Those who give through special giving almost always experience a greater joy and satisfaction in their walk with God because they see how their gifts can make a difference.
Special giving can help church members to pass a spiritual heritage to their children and heirs as well as financial resources to meet their needs. Parents and grandparents who combine charitable giving plans with an inheritance may find this an opportunity to convey their faith values to those who receive personal bequests. This may come in the form of a letter of explanation as to the values and faith of the person planning for their heirs. Or, it may be a gift that benefits both a charity and family members such as a charitable gift annuity or charitable remainder unitrust.
Special giving often provides tax benefits for the donor that will enable them to give significantly more to the Lord's work and to their families. Of course, every donor needs to review this with their professional advisor to see how this would work in their specific situation.
General Policies on Contributions
The West-Ark Church of Christ welcomes your contributions and your assistance in determining how those funds may be best used. You should remember, however, that outright contributions cannot be deducted if they are directed to the benefit of a specific individual nor if you retain interest or control in them. Please keep in mind that a contribution must be effectively received by the church (physically or by postmark) within a tax year in order to be deductible in that year.
West-Ark has a written policy on the acceptance and disposition of gifts. For instance, the policy provides for immediate liquidation of most donated property. We would be pleased to discuss the policy and specific situations with you or your advisor.
Tax Deductibility
Should Christians be concerned about tax deductibility? Shouldn't we give without being concerned with whether we receive a benefit? Certainly, our gifts to the Lord are not motivated by tax consequences. However, one might consider that our society recognizes the value of gifts to organizations, including the church, which leverages those gifts with their own labor for the benefit of others. Significantly, tax deductibility allows one to give a larger gift to the church. Taking advantage of the established rules for tax deductibility in our giving would seem to be good stewardship of the blessings that God has bestowed on us.
Disclaimer
This information is provided only to give you an idea what avenues of giving may be available. Tax and estate laws can change, and certain approaches to giving may not be appropriate for all individuals. You should independently verify any information herein, and you should consult legal or financial advisors before you take action. We cannot serve as financial or legal counsel. Every donor is entitled to independent legal counsel as he or she considers charitable gift and estate plans. We want you to be fully and correctly informed, and we will be glad to put you in contact with professionals who will give you the information and advice that you need.
15 May 2001
Additional information regarding gifts can be found in the Church's "Gift Acceptance Policy."
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Link to IRS documents:
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